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Reference Tools

Glossary

The Platts industry glossary covers common terms and abbreviations from the oil, power, petrochemicals, nuclear, gas, coal and metals markets and industries. Please email webeditor@platts.com to let us know if there is an entry you would like us to add, clarify or expand, or if you think we have made a mistake in any of our definitions.

The 15-Day Brent crude oil market is so-called because a seller must give a buyer a minimum 15 days notice of the intended loading dates for a cargo of Brent Blend North Sea crude oil in any particular month traded. 15-Day Brent is traded in discreet months. At the point where the buyerwho may be at the end of a long trading chainis informed of the loading dates, the cargo becomes a so-called Dated Brent cargo.

AAUs

Assigned Amount Units: National level greenhouse gas emission allowances established under the Kyoto Protocol. One AAU represents one metric ton of CO2 equivalent greenhouse gas. The amount held by each country is determined by the 1990 emissions baseline and national Kyoto target for 2008-2012. AAUs are tradable at state level only. A country failing to meet its Kyoto emissions reduction target can buy AAUs from another Kyoto Annex I country that has met its target and holds a surplus.

A/F

Abbreviation for anti-freeze, one of the larger end-uses of monoethylene glycol.

Abandon

To allow an option to expire worthless.

Accumulation

A situation in which the market is dominated by buyers, who ‘accumulate' the commodity they are trading.

Afforestation

The establishment of trees on an area that has lacked forest cover for a very long time or has never been forested (see also reforestation ).

AG

This phrase and its abbreviation AG are current in some sectors of the oil industry, especially the tanker world, as a designator for the Persian Gulf, which is the correct name in international law for the body of water bordered by the UAE, Saudi Arabia, Qatar, Kuwait, Iraq and Iran. Note that there is a Gulf of Arabia which is not the same piece of sea as the Persian Gulf.

AGO

Atmospheric gasoil.

Alkylate

A gasoline blending component composed of isobutane and propylene or butylene.

Alternating current (AC)

A periodic current, the average value of which over a period is zero. Typically refers to a current that reverses its direction at regularly recurring intervals of time and that has alternately positive and negative values. Almost all electricity utilities generate AC electricity because it can easily be transformed to higher or lower voltages

Alternating current distribution

The supply of electricity from one or more major receiving stations to the point of consumption. Energy is generally supplied at a voltage that can be directly used by large rotating machinery and step-down transformers are used to reduce the voltage for most commercial or residential utilization

American style option

An option which can be exercised by the buyer (holder) at anytime during its life

Ampere (amp)

The unit of measurement of electrical current produced in a circuit by 1 volt acting through a resistance of 1 ohm. The measure of the rate of flow of electrons past a given point in an electric conductor such as a power line

Ancillary services

Any service required by a system operator to deliver electricity to the ultimate consumer. Ancillary services include balancing services, load following, or providing kilovars (reactive power).

Andrew's Pitchfork

Three parallel trendlines are drawn linking a major low or high with a point either side of this marking an intermediate high or low. The lines are extended to generate support/ resistance levels. The lines look a bit like the prongs of a pitchfork, hence the indicator's name.

Aniline point

Reports the aromatics content of a mixture.

Annex I Parties

The 40 industrialized countries that were members of the OECD in 1992, plus countries with economies in transition (EIT parties), including the Russian Federation, the Baltic States, and several Central and Eastern European States. This group ratified the Kyoto Protocol and agreed to try to limit their GHG emissions relative to a 1990 baseline.

Annex II Parties

The OECD members of Annex I, minus the EIT parties, which agreed to pay developing (non-Annex I) countries for climate change adaptation.

anode

A rectangular plate of metal cast in a shape suitable for refining by the electrolytic process.

ANS

Alaska North Slope crude oil.

anthracite

A hard, black coal with high energy content, often referred to as hard coal

API

Usually: American Petroleum Institute. But note that there is an Italian oil company called Anonyma Petroli Italiana, universally referred to in Europe as API.

API gravity

An arbitrary scale expressing the gravity or density of liquid petroleum products devised jointly by the American Petroleum Institute and the National Bureau of Standards. The measuring scale is calibrated in terms of degrees API. Oil with the least specific gravity has the highest API gravity. The formula for determining API Gravity is: API gravity = (141.5/specific gravity at 60 degrees F) - 131.5.

Amsterdam-Rotterdam-Antwerp. Abbreviation commonly used in shipping to designate discharge or loading at one of these three ports.

Arab Gulf

This phrase and its abbreviation AG are current in some sectors of the oil industry, especially the tanker world, as a designator for the Persian Gulf, which is the correct name in international law for the body of water bordered by the UAE, Saudi Arabia, Qatar, Kuwait, Iraq and Iran. Note that there is a Gulf of Arabia which is not the same piece of sea as the Persian Gulf.

Aramco

Technically refers to a now-defunct US-Saudi company. But in practice widely used to designate the company's modern-day descendant Saudi Aramco.

arbitrage

The simultaneous purchase of a commodity/derivative in one market and the sale of the same, or similar, commodity/derivative in another market in order to exploit price differentials

aromatics

Group of petrochemicals characterized by a ring structure, produced in refinery reformers and petrochemical plants. The most commonly traded are benzene, toluene and xylenes. Used for chemical production or as high-octane components for gasoline blending.

asph

Occasional abbreviation for asphaltene.

asphalt

1. A mixture of bitumen and mineral aggregate as prepared for the construction of roads or in other paving uses. 2. In the US, asphalt refers to the product known as bitumen in the rest of the world.

assay

A chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained.

assessment

A Platts assessment is the product of a market survey and the application of strict methodological rules to determine the repeatable tradable price range for a commodity during the assessed period. Assessment typically aims to zero in on these typical transactable levels by discarding unrepresentative market information (out-of-market bids, offers and transactions), and the process differs in this respect from indexation, which is an inclusive process, averaging all available market information. Platts produces indexes in highly liquid markets, for example North American natural gas; and assessments in illiquid markets, such as those for physical oil. Platts assessments typically are published as a low-high range for each instrument. See Platts Guide to Specifications and also Frequently Asked Questions for details of Platts methodologies.

associated gas

Also known as wet gas. natural gas produced in association with crude oil. Non-associated gas, or dry gas, is natural gas occurring on its own. Also, LPG is produced as an associated gas and must be treated ("dried") before being used.

at-the-money

An option whose exercise price is equal, or close to, the current price in the underlying market

AUD

Australian dollar.

availability factor

In a nuclear power plant, the disposable energy which could have been generated during a period, expressed as a percentage of the energy which could have been produced by a continuous power rate during the same period - essentially relates to the time a reactor spends off line owing to planned outages or unplanned stoppages..

available but not needed capacity

Net capability of main generating units that are operable, but not considered necessary to carry load and cannot be connected to load within 30 minutes

avails

Jargon, short for availabilities, and actually meaning supplies.

average cost pricing

A pricing mechanism based on dividing the total cost of providing electricity incurred in a period by the number MWh (wholesale) and kWh (retail) sold in the same period

avgas

High octane aviation gasoline used in piston type aircraft engines.

avoided cost

The cost to produce or procure electric power that an electricity utility does not incur because it purchases this increment of power from a qualifying facility. It may include a capacity payment and/or an energy payment component

B/L

Documentation legally demonstrating a cargo has been loaded. The bill of lading is signed by the captain of the ship and the contract supplier. Abbreviated as B/L.

Backwardation

A market where the price for nearby delivery is higher than for further forward months. The opposite of backwardation is contango.

Balancing

The requirement imposed by electricity grids or natural gas pipelines that supply and demand be equal over a certain time period

Barge

A vessel carrying oil, usually on rivers, containing between 8,000 and 50,000 bbl, or weighing 1,000 to 10,000 tonnes. In the US, barges can be up to, and occasionally over, 100,000 bbl in capacity. See tankers for discussion of other vessel sizes.

Barrel

A volumetric unit of measure for crude oil and petroleum products. 1 barrel is 42 US gallons, 35 imperial gallons or 159 liters. There are roughly 7.33 bbl of crude oil to a tonne, but the precise conversion obviously depends on the specific gravity of the oil.

Base gas

Gas required in a storage pool to maintain sufficient pressure to keep the working gas recoverable.

Base load

The minimum amount of electric power delivered or required over a given period of time at a steady rate. The minimum continuous load or demand in a power system over a given period of time

Base load capacity

The generation units normally used to meet demand around-the-clock.

Base load plant

A plant normally operated to take all or part of the minimum continuous load of a system, and which consequently produces electricity at an essentially constant rate. A base load plant typically has relatively high fixed costs and low unit operating costs. Traditionally, nuclear plants have been considered as base load plants.

Believing that a price will fall. Also describes a market which shows signs of falling.

Bid

A proposal to buy a commodity/derivative at a specified price.

Bid price

The price at which a buyer is prepared to buy.

Bill of lading

Documentation legally demonstrating a cargo has been loaded. The bill of lading is signed by the captain of the ship and the contract supplier. Abbreviated as B/L.

Bio-leaching

A process for recovering metals from low-grade ores by dissolving them in solution, the dissolution being aided by bacterial action.

Biomass conversion

The process by which organic materials, such as wood waste or garbage, are burned for direct energy or electrical generation, or by which these materials are converted to synthetic natural gas

Bituminous coal

The most common coal, which is dense, black and has a moisture content of less than 20%. Used for generating electricity, making coke, and space heating

Black start

A rapid start up of an off-line generation source

Blackout

The emergency loss of the source of electricity serving an area caused by failure of the generation, transmission, or distribution system

Black-Scholes

Formally the Black-Scholes-Merton model, it is a model of financial markets with derivatives and gives rise to the Black-Scholes formula. This formula solves for the "correct” future value of a European option on non-dividend-paying asset with normally distributed price returns.

Blendstock

A component combined with other materials to produce a finished refined product.

Blister copper

The product of the Bessemer converter furnace used in copper smelting. It is a crude form of a copper, assaying about 99% copper, and requires further refining before being used for industrial purposes.

Blowmolding

A process by which polymers are "blown" into a tubular mold. Also refers to a specific grade of polyethylene, sometimes abbreviated as bmldg.

Bollinger bands

A system based on the premise that prices revert to their mean. The standard deviation of the moves away from the mean are used to form two bands around the price. Whenever the price breaks below or above the band, it is deemed too extreme a move and therefore liable to correct back from the standard deviation towards the mean of the price.

BPA

Bonneville Power Authority. Electricity utility in the US Pacific Northwest, supplying power to several aluminum smelters. Acceptable as second-reference abbreviation.

Breakout

A sudden breakout of prices from a chart pattern that has been forming for some time. It marks the end of a period of uncertainty. The breakout point can often be used to guess how far prices will go in that direction.

Brent blend

The most commonly traded North Sea crude oil. Brent has an API of about 37.5. The blend is technically a mix of crude from the Shell UK-operated Brent field and the BP-operated Ninian field. The blend is, however, commonly referred to simply as Brent.

British thermal unit (btu)

British thermal unit. The quantity of heat required to raise one pound of water (about one pint) one degree Fahrenheit at or near its point of maximum density. A common unit of measurement for gas prices. 1034 Btus = 1 cubic foot. An MMBtu (-mil Btus) is roughly equivalent to an Mcf (a thousand cubic feet). See also therm, dekatherm, natural gas.

Brownout

The partial reduction of electrical voltages caused by customer demand being higher than anticipated or by the failure of the generation, transmission, or distribution system.

BS&W

Bottom sediment and water, usually expressed as a percentage by weight. Tanker expression, acceptable on second reference.

Btu

British thermal unit. The quantity of heat required to raise one pound of water (about one pint) one degree Fahrenheit at or near its point of maximum density. A common unit of measurement for gas prices. 1034 Btus = 1 cubic foot. An MMBtu (-mil Btus) is roughly equivalent to an Mcf (a thousand cubic feet). See also therm, dekatherm, natural gas.

BTX

Benzene, toluene and xylene.

BTX extraction

The process for removing benzene, toluene and xylene from reformate or pyrolysis gasoline.

Bullish

Believing that a price is going to rise.

Bunker C

A residual fuel used as ship's fuel, which usually has a high sulfur content and high viscosity.

Burner-tip

The point at which natural gas is used as a fuel.

Burnup

Measure of the total energy released by nuclear fuel per unit of its mass, typically measured in gigawatt days/mt or gigawatt days/mt of heavy metal.

Busbar

The point at which power is available for transmission. A conductor or group of conductors that serve as a common connection for two or more circuits, generally in the form of insulated cable, rigid rectangular or round bars, or stranded overhead cables held under tension

Busbar cost

The cost of producing one kWh of electricity delivered to, but not through, the transmission system (typically US)

Butadiene

A derivative of crude C4s. Butadiene is extracted from the CC4 stream.

C+F

Cost and Freight. A pricing basis in which the buyer pays the cost of the cargo and the freight costs. See also CIF, FOB and out-turn.

C4s

Carbon 4s. Designates the C4 stream produced by an ethylene plant. Crude C4s are either co-cracked or sent to a butadiene extraction plant or MTBE plant.

Call option

An option that gives the buyer (holder) the right but not the obligation to buy a specified quantity of an underlying futures at a fixed price, on or before a specified date. The grantor of the option is obliged to deliver the future at the fixed price if the holder exercises the option

Candlesticks

A Japanese charting system which maps the open- high-low-and close of periodic price movements. A box is drawn around the open and close, and painted white if the close is above the open, and black if the close is below the open. The boxes and their little heads and tails look like candles and their wicks. Candlestick studies are full of exotic terms like Morning Star and Dark Cloud Cover; these describe how the black and white candles look, and can be interpreted as buy or sell signals.

Capacitor

A transmission element designed to inject reactive power into the transmission network. Also used to increase voltages, reduce loadings, and increase available kW output from generators. Capacitor ratings typically given in Megavars.

Capacity

The power output rating of a generator, typically in megawatts, measured on an instantaneous basis.

Capacity (purchased)

The amount of capacity available for purchase from other power systems.

Capacity charge

One element of a two-part pricing method used in power transactions (energy charge is the other element. Assessed on the amount of capacity being purchased, typically in units of currency per MWh.)

Capacity margin

The amount of capacity above planned peak system demand available to provide for scheduled maintenance, emergency outages, system operating requirements, and unforeseen demand.

Capacity release

The temporary relinquishment of firm transportation capacity on a pipeline. The capacity holder releases the capacity in the open market and accepts bids for use of that capacity over a specific, limited period of time.

Capacity relinquishment

The permanent relinquishment of firm capacity on a pipeline.

Cap-and-trade

A market mechanism designed to reduce the cost of cutting pollution. The regulator caps pollution at a level below business-as-usual and allocates allowances to industry up to but not exceeding the cap. Covered entities must have their emissions independently verified and must surrender allowances to match their annual emissions each year, normally with penalties for non-compliance. Since the overall cap is below actual emissions, this cuts the overall level of pollution and creates a scarcity of allowances, and therefore a monetary value. Those with a surplus may sell them to those with a shortfall, creating a tradable market for allowances.

Caribs

Tanker market abbreviation for Caribbean.

Cash and carry

An arbitrage transaction involving the simultaneous purchase of a cash commodity with borrowed money and the sale of the appropriate futures contract.

Cash market

The physical market underlying a futures or options contract.

Cash settlement

The settlement of futures or options by paying a cash difference, rather than taking/making physical delivery.

Cat cracker

A catalytic cracker.

Cat gasoline

A gasoline blending component made in a cat cracker.

Catfeed

Feedstock to a catalytic cracker, usually vacuum gasoil.

Cathode

In market terms, a rectangular plate of metal, produced by electrolytic refining, which is melted into commercial shapes such as wirebars, billets, ingots etc. Copper and nickel are commonly traded and delivered in this form.

CDM

A UN scheme set up under the Kyoto Protocol to allow industrialized countries to invest in greenhouse gas emissions reduction projects in developing countries in return for tradable offset credits (CERs).

Like it sounds, a channel in which prices are moving. Parallel trendlines are drawn along the lows and highs of a price chart, forming a channel in which prices move. The trendlines form areas of support and resistance. Depending on the trend, the channel can be a downchannel or an upchannel.

Chemical grade

Refers to a particular grade of polypropylene with around 93-94% purity.

China main port

Most petrochemical trade in China is carried out basis China Main Port, rather than a specific port.

CIF

Cost, insurance and freight charges for shipping products. CIF prices include these charges. See C+F, FOB.

Circuit

A conductor or a system of conductors through which electric current flows

City-gate

Physical location where gas is delivered by a pipeline to a local distribution company.

Clean Development Mechanism

A UN scheme set up under the Kyoto Protocol to allow industrialized countries to invest in greenhouse gas emissions reduction projects in developing countries in return for tradable offset credits (CERs).

Clearing

The process of matching trades, settling trades and provision of a guarantee for traded contracts, often a service performed by exchanges

Clearing fee

A fee charged by a clearing house for clearing trades

Close out

Finalizing a transaction by making an equal and opposite trade to an open position

Cloud point

The temperature at which a fuel, when cooled, begins to congeal and take on a cloudy appearance caused by the bonding of paraffins.

CME

Chicago Mercantile Exchange. Also known in the energy industry as "the Merc."

CMP

Most petrochemical trade in China is carried out basis China Main Port, rather than a specific port.

CNG

Compressed natural gas. An automotive fuel, mainly used in Canada and in transport fleet operations in the US.

CNR

Charterer Not Reported. A tanker market term.

COA

Contract of affreightment between ship owner and charterer.

COP

Conference of Parties to the UNFCCC. Annual meeting of signatory countries to the UNFCCC to assess progress in dealing with climate change.

Cofiring

The process of burning natural gas in conjunction with another fuel. Cofiring can reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions, the precursors of acid rain.

Cogeneration

The production of both electricity and useful thermal energy from the same energy source. Natural gas tends to be a favored fuel for combined-cycle cogeneration units, in which waste heat is converted to electricity.

Combined cycle

The combination of one or more gas turbine and steam turbines in an electric generation plant. An electric generating technology in which electricity is produced from otherwise lost waste heat exiting from one or more gas (combustion) turbines. The heat is routed to a conventional boiler or to a heat recovery steam generator for use by a steam turbine in the production of electricity. This process increases the efficiency of the electric generating unit

Combined heat and power plant

Power plant, usually embedded, which produces both electric and thermal energy in the form of steam. See cogeneration.

Commodity Channel Index

CCI measures the variation of an instrument's price from its mean. High / low values indicate that prices have moved too far from their mean. The usual range is +/- 100 and anything outside this is overbought or oversold.

Compressed natural gas

Compressed natural gas used in vehicles and in other applications not attached to a pipeline.

Compressor station

Facility that moves gas through transmission lines or into storage by creating pressure differentials. Most stations use some of the gas moving through the line as fuel.

Compressor station

Facility that moves gas through transmission lines or into storage by creating pressure differentials. Most stations use some of the gas moving through the line as fuel.

Concentrates

A fine, powdery product of the milling process containing valuable metal and from which most of the waste material in the ore has been eliminated and discarded as tailings. Often abbreviated to concs.

Condensate

Very high API crude "oil," which in its natural state is in gaseous form but which condenses to liquid upon production. OPEC has for many years argued over the precise definition of condensates, since it does not include them in individual countries' crude production quotas. See NGL.

Conductor

A substance or body, usually in the form of a wire, cable, or busbar, that allows a current of electricity to pass continuously along it.

Conference of Parties

Conference of Parties to the UNFCCC. Annual meeting of signatory countries to the UNFCCC to assess progress in dealing with climate change.

Congestion

When prices trade at similar levels over a period of time, the chart becomes cluttered with business at these levels and is referred to as 'congested'. Congestion areas are often seen as providing support/resistance. They are the levels at which, rather than breaking into new ground, prices tend to bog down and become trapped.

All this means is that prices are moving in a broadly sideways range after a sharp move in one direction. If the prices have risen sharply, the gains are ‘consolidated', often for several days after the major move.

Contango

Market situation where prices are higher for forward delivery dates than for nearer delivery dates. See also backwardation .

Conti Index

Platts demand-weighted index of continental European power assessments.

Periodic (monthly/quarterly/annual) price agreed between sellers and buyers of commodities for term business. Often abbreviated to CP. Most oil contract prices are "floating", that is they are tied to spot market assessments published by Platts or other market pricing services rather than set at outright levels.

Coolant

A substance circulating through a nuclear reactor to remove or transfer heat. Most common coolants are carbon dioxide, water (light), and heavy water.

CP

Periodic (monthly/quarterly/annual) price agreed between sellers and buyers of commodities for term business. Often abbreviated to CP. Most oil contract prices are "floating", that is they are tied to spot market assessments published by Platts or other market pricing services rather than set at outright levels.

Crack spread

The simultaneous purchase or sale of crude against the sale or purchase of refined petroleum products. These spread differentials which represent refining margins are normally quoted in dollars per barrel by converting the product prices into dollars per barrel and subtracting the crude price.

Residue remaining after a straight run fuel has been processed by enhanced refining methods. See cracking.

Cracking

Refining process to break large molecules into smaller ones. Principal cracking techniques are: Thermal cracking: Heating of hydrocarbons to very high temperatures, usually above 450ý C. Thermal cracking is no longer widely used, except in: Visbreaking: Thermal cracking of viscous crude residues to make fuel oil, and in: Delayed Coking: Thermal cracking of atmospheric/vacuum residues to make electrode grade coke. Catalytic cracking: Cracking using catalysts to enhance molecule breaking, particularly in the production of high octane gasoline. Hydrocracking: While thermal and catalytic cracking produce shorter hydrocarbon molecules largely by disposing of the excess carbon atoms, hydrocracking inserts hydrogen atoms to achieve the same effect. Steam cracking: A petrochemical process which produces olefins, particularly ethylene, and, in some cases, aromatics. Similar to thermal cracking Co-Cracking: A petrochemical process in which the c4 stream from an ethylene plant is recycled into the feedstock.

Cubic feet per second

A measurement of water flow representing one cubic foot of water moving past a given point in one second.

A flow of electrons in an electrical conductor. The rate of movement of the electricity, measured in amperes.

curtailable rate

An option offered by utilities to customers who can accept specified amounts of service reduction in return for reduced electric rates.

cushion gas

Gas required in a storage pool to maintain sufficient pressure to keep the working gas recoverable. Also called "base gas".

custom smelter

A smelter which processes concentrates from independent mines. Concentrates may be purchased or the smelter may be contracted to do the processing for the independent company—a process also known as toll smelting.

cycles

Cycle theory is based on the premise that prices are affected by an underlying cycle. Some of these are well known: the 54-year Kondratieff Wave economic cycle. Others are less obvious. Commodity indexes are affected by a 10 1/2 month futures cycle (individual commodities do not necessarily follow this).

cycling

Number of times the same quantity of gas can be injected into and withdrawn from storage in a set period of time. Certain types of storage fields, like aquifer and depleted oil and gas fields, need to be filled and largely emptied during a specific period of time in order to maintain the physical capabilities of the geologic structure.

DAP/DAT

DAP/DAT stands for Delivered at Place/Delivered at Terminal. They are incoterms that replaced DAF (Delivered at Frontier) a few years ago.

DAP/DAT Laredo for polymers would be an export assessment from the US to the Mexican market, which is the biggest importer of US-origin polymers (both PE and PP). The majority of these exports occur in bulk (railcars).

DAP/DAT essentially means that the seller delivers (and accounts for all the cost related to freight) at a specific place, with Laredo, Texas, being the major destination at the border.

Platts current FAS Houston polymer assessments are for waterborne exports (bagged) in containers. These include the bagging cost and the transport cost from the bagging facility to the port, but the freight and everything else is on the buyer.

dated Brent

Brent cargoes are known as dated Brent cargoes once they acquire a specific set of loading dates, usually at a point about two weeks from loading. Before this point, Brent cargoes are typically traded generically as so-called 15-day Brent. The dated Brent market, which Platts assesses on a 7-15 day forward basis (7-17 days on a Friday), generates prices which have become a key benchmark for contract pricing of crude oil worldwide.

decay product

An atomic nucleus, stable or radioactive, which originates from the process of radioactive decay of an unstable nucleus. Sometimes known as a daughter product.

declining block rate

A fall in an electricity rate when an increase in consumption cuts the cost to a utility of providing service

degree day

Degree days are measured as the number of degrees above or below a standardized temperature on any given day. In winter, US traders track heating degree days week by week, or month by month, normally against a standard temperature of 65F, on the basis of how many degrees of heat are required to bring municipal office buildings up to this temperature. Five days of heating by 2 degrees, for example, equals 10 heating degree days. In summer, the market tracks cooling degree days.

The volume that a particular well, storage field, pipeline or distribution system can supply during a 24-hour period.

delta hedging

The process whereby the grantor of an option decides to buy or sell more or less of an underlying futures contract in order to protect against being declared upon by the options holder. If delta hedging, the grantor of a call option will buy more of the futures contract if it rises in value towards the strike price (as the probability of being declared upon rises towards 100%). The grantor of a put option will typically sell more of the underlying futures contract if it slides in value (as the probability of being declared upon rises towards 100%).

delta neutral

A state where the grantor of an option has balanced the probability of being declared upon through buying/selling the underlying futures contract.

demand

In power: the rate at which electricity is delivered to or by a system at a given instant or averaged over a designated period, usually expressed in kilowatts or megawatts. In oil: the rate of consumption of refined products, normally measured in millions of barrels per day, or in million tonnes per year.

demand side management (dsm)

All activities or programs undertaken by an electricity system or consumers to influence the amount and timing of electricity use.

demurrage

The detention or delay of a vessel in loading or unloading beyond the time agreed upon. Demurrage charges are usually incurred for any delay.

depleted uranium

Uranium where the uranium-235 assay is below the naturally occurring 0.711%. Depleted uranium is a by-product of the enrichment process.

DER

Delivered East of the Rockies. Most US solvents and some intermediates are sold on this basis.

DERD

Abbreviation for Directorate of Engine Research and Development. DERD 2494 is a UK Ministry of Defense jet fuel specification.

derivative

A financial transaction that derives its value from the value of another asset. Commodity derivatives derive their value from physical commodity transactions. The value of a derivative rises and falls in accordance with the value of the underlying asset. Derivatives can be traded on regulated exchange markets or over-the-counter.

design day

A 24-hour period of demand used as a basis for planning gas capacity requirements.

diesel index

A measure of the ignition quality of a diesel fuel calculated from a formula involving the gravity of the fuel and its aniline point.

Differential

The difference between two prices. A large and increasing percentage of all oil transactions are effected on the basis of differentials, also known as spreads,rather than outright flat prices.

direct current (dc)

An electricity current that flows in one direction with a magnitude that does not vary or that varies only slightly.

dirty power

Momentary disturbances in transmission, usually detectable only by sensitive electronic equipment.

discount

An amount agreed between buyer and seller to be subtracted from an existing benchmark.

displacement

The substitution of less expensive energy generation for more expensive generation. Usually this means reducing or shutting down production at a high cost plant and using cheaper generation when it is available.

distribution

The system of lines, transformers and switches that connect a transmission network to customer load. The transport of electricity to ultimate use points such as homes and businesses.

distribution (2)

A state where the market is dominated by sellers, who are holding length and 'distributing' to the players who need to buy.

DNA

Designated National Authority: a competent national body set up in most Kyoto Protocol signatory countries to provide approval for CDM projects.

DOE

Designated Operational Entity (in context of CDM): An independent company accredited to validate and verify emissions reductions at a CDM or JI project.

domestic/retail competition

The competitive sale of gas to residential or small commercial customers, allowing those customers a choice of supplier other than the local distribution company. In Europe and the UK the term is domestic competition; in North America it's retail competition.

dore bar

The final saleable product of a gold mine, usually consisting of gold and silver.

double bottom

A bullish reversal pattern characterized by two lows at roughly equal value.

double top

A bearish reversal pattern characterized by two highs at roughly equal value.

Dow theory

Theory of market movement developed by Charles Dow that prices move in defined trends of successive higher peaks and higher troughs in an uptrend, and lower peaks and lower troughs in a downtrend. Dow divides trends into primary, secondary and minor. Volume patterns are associated with specific points in a trend. Dow theory is the foundation of most modern technical theory.

Natural gas which does not contain liquid hydrocarbons. Gas is usually priced on a dry basis.

DWT

Deadweight tonnage. See tankers.

E-4

Russian high sulfur straight-run feedstock. Formerly called F-10.

EB

The UN Clean Development Mechanism's Executive Board.

economy energy

Energy sold on a non-firm basis and subject to recall at the discretion of the selling party.

EFP

Exchange of futures for physical: refers to the exchange of a futures position for a physical (swap) position.

EIS

A written report, compiled prior to a production decision, which examines the effects proposed mining activities will have on the natural surroundings of an exploration property. Abbreviates to EIS.

electrolytic refining

The process of purifying metal ingots which are suspended as anodes in an electrolytic bath, alternated with refined sheets of the same metal, which acts as starters or cathodes.

Elliott Wave

A theory developed by Ralph Elliott that prices move in a main five-wave trend followed by a corrective three- wave trend, the extent and scope of which are governed by certain commonly seen ratios (see Fibonacci).

embedded cost

The historical cost of all facilities in the power supply system.

enabling agreement

An agreement that provides the general terms and conditions for the purchase, sale, or exchange of electricity but does not list specific contract details or obligate either party to perform.

energy charge

That portion of the charge for electricity based upon the electrical energy (kWh) consumed or billed. Also known as the commodity charge.

enriched uranium

Uranium where the uranium-235 assay is above that of natural uranium. Enriched uranium product refers to enriched uranium resulting from the enrichment process, ie the process by which the assay of feed material is increased.

environmental impact study

A written report, compiled prior to a production decision, which examines the effects proposed mining activities will have on the natural surroundings of an exploration property. Abbreviates to EIS.

Ethyl tert-butyl ether (ETBE) is commonly used as an oxygenate gasoline additive in the production of gasoline from crude oil.

ETS

(European Union) Emissions Trading Scheme. A CO2 cap-and-trade scheme covering all 27 EU member states as well as non-EU countries: Iceland, Liechtenstein and Norway.

EUA

European Union (emission) Allowance: the standard tradable emissions unit under the ETS. One EUA allows the holding company to emit one metric ton of CO2

exercise

The procedure by which an option holder takes up the rights to the contract and is delivered a long (call) or short (put) futures position by the grantor at a fixed price.

exit fee

A fee that is paid by a customer leaving a utility network intended to compensate the utility in whole or part for the loss of fixed cost contribution from the exiting customer.

expiry (options)

The date by which an option holder must decide whether to exercise or abandon an option.

exponentially-smoothed moving average

An average calculated using a system where a percentage of today's price is applied to yesterday's moving average value, eg 9% MA =(today's close*9%)+(ydy's close*91%).

farm-out

An interest in an oil or gas lease that is granted by the lease holder to a third party.

FAS

Free Alongside Ship. Product is sold when the goods in question are placed on the quay alongside the vessel. FAS is often traded in the US polymer export market.

fast breeder reactor

A fast reactor with fertile material loaded around the core, to be converted into fissile material through neutron capture, which generates more fissile material than is consumed.

fast reactor

A reactor in which the fission chain reaction is sustained with high-energy or high-speed (ie fast) neutrons.

FCA

Free Carrier. The rail- and roadfreight equivalent of Free on Board.

FCC

Fluid catalytic cracker. See cracking.

FCC (2)

First class charterer. Used by tanker brokers to conceal the identity of a tanker charterer while signaling that the party concerned is a serious player.

FD

Free Delivered. This is effectively the delivered end of an FCA deal.

feedstock

Raw material used in a processing plant.

feedstock gas

Gas used as a raw material for chemical properties in creating an end product (like plastics or fertilizer).

FERC

Federal Energy Regulatory Commission. A US federal agency created in 1977 to regulate, among other things, interstate wholesale gas and transportation of gas and electricity at "just and reasonable" rates. Located in Washington.

FERC order 636

The 1992 order that unbundled US pipeline services, requiring pipelines to cease their merchant function and instead become solely a transporter of gas.

fertile material

Material which can be converted into fissile material by the capture of a neutron. Sometimes referred to as source or breeder material, examples include uranium-238 and thorium-232.

Fibonacci

Fibonacci levels are commonly observed ratios between the size of a main trend and retracements. The main ratios are 38.2%, 50%, 61.8%, 100% and 161.8%. These ratios are derived from the number series named after the Italian mathematician: 1,1,2,3,5,8,13, 21... If the first term is divided by the one to the right of it, the result gets nearer and nearer to 0.618, a ratio that recurs in nature and art. Fibonacci levels are used in the weird and wonderful Elliott Wave Theory.

final disposal

The storage of nuclear waste and/or spent fuel in a repository near the surface or in a deep geological formation, without the intention of retrieval.

FIP

Free In Pipe. LPG is sometimes sold on this basis.

firm energy

Energy sales which, although not subject to interruption for economic purposes, may be interrupted under force majeure conditions.

firm gas

Gas sold on a continuous basis for a defined contract term.

firm power

Electricity capacity intended to be available at all times during the period covered by a guaranteed commitment to deliver, even under adverse conditions, but subject to force majeure interruptions. Firm power consists of either firm energy, firm capacity, or both.

first core

All the nuclear material required to being initial operation of a reactor.

fissile material

Any element containing an isotope with nuclei capable of undergoing fission as a result of interaction with slow neutrons in a nuclear reactor. The two most common examples of such isotopes are uranium-235 and plutonium-239, but uranium-233 is also important.

fission

The splitting of a heavy nucleus into two (occasionally three) parts following neutron capture, accompanied by the release of energy, two or more neutrons, and radiation. The released neutrons may cause the fission of other fissile atoms, thus creating a chain reaction; this physical reaction is the basis of nuclear energy generation.

fixed charge

The charge calculated to recover all or a portion of the fixed costs of a utility, including generation facility and transmission lines, meters, and some taxes.

flag

A price chart pattern that looks like a flag-pole with a rectangular 'flag' hanging off it. It is often seen as a sign that the trend is likely to continue after a brief consolidation.

flash point

The lowest temperature under very specific conditions at which a combustible liquid will give off sufficient vapor to form a flammable mixture with air in a standardized vessel. Denotes the volatility of the product.

flask

Unit and container for measuring mercury, equal to 76lb.

flexibility mechanism

The UK's flexibility mechanism, also known as the flex, is operated by Transco (British Gas) to make sure the amount of gas in the pipeline remains more or less constant at all times. If the system goes out of balance, Transco uses the flex to balance the system by buying and selling gas based on bids and offers submitted by shippers.

flue gas desulfurization unit (scrubber)

Equipment used to remove sulfur oxides from the combustion gases of a boiler plant before discharge to the atmosphere. Chemicals like lime are used.

FOB

Usually abbreviated to FOB. FOB prices exclude all insurance and freight charges. Most oil is sold either FOB (effectively priced at the loading port) or CIF (effectively priced at the delivery port).

FOD

Fuel Oil Domestique. The French term for heating oil.

force majeure

Denotes circumstances beyond the control of a company, which force the breaking of a contract.

forced outage rate

The rate of shutdown of a generating unit, transmission line, or other facility for emergency reasons or a condition in which the generating equipment is unavailable for load because of unanticipated breakdown.

Forties

The first substantial oil field discovered in the British sector of the North Sea. Also used to refer to the crude oil produced from the field.

forward price

The price today for the delivery of a commodity to a specific location on a specified date in the future.

forward price curve

When plotted together, a series of forward prices creates a forward curve, reflecting a range of today's tradable values for specified dates in the future. While it is a key indicator of today's market sentiment, the forward curve is not a price forecast - it is a set of today's prices for delivery during future dates. The structure shown by the forward curve is most often used as a guide for trading and hedging within the delivery date range along that curve.

forward contract

An over‐the‐counter transaction between two companies involving the future delivery of a commodity at a specific date and location at a fixed price, established on the date at which the contract is originated. Similar to a futures contract, but forwards can be customized to suit the specific needs of the counterparties involved while a futures contract is standardized and traded on an exchange.

Free Carrier

The rail- and roadfreight equivalent of Free on board.

Free on Board

Usually abbreviated to FOB. FOB prices exclude all insurance and freight charges. Most oil is sold either FOB (effectively priced at the loading port) or CIF (effectively priced at the delivery port).

FT

Firm transportation.

fuel assembly

An array or assembly of individual fuel rods containing UO2, MOX or uranium metal pellets, used in commercial reactors.

fuel cell

A device that generates direct current to electricity by means of an electrochemical process.

fuel fabrication

The production of reactor fuel, usually in the form of ceramic pellets, encased in metal tubes which are then arranged in fuel assemblies.

fuel switching

Substituting one fuel for another based on price and availability. Large industries often have the capability of using either oil or natural gas to fuel their operation and of making the switch on short notice.

full-forced outage

The net capability of main generating units that is unavailable for load for emergency reasons.

fusion

The formation of a heavier nucleus from two lighter ones (usually hydrogen isotopes) with the attendant release of a large amount of energy.

futures contract

An agreement to make or take delivery of a commodity at a fixed date or strip of dates in the future, at a price agreed upon at the time of dealing.

g/l

Grams per liter. Also g/ml. Used as a measure of contaminants and to specify density of refined oil products. Standard German grade gasoline, for example, is specified as 0.755 g/ml.

gal

Abbreviation for US gallon.

gallon

Generally accepted across the oil industry to refer to a US gallon. There are 42 US gallons in a barrel. There are 3.78541 liters in a gallon. There are 1.2 US gallons to the British imperial gallon.

Gann theory

An eclectic blend of fact and fantasy, the works of WD Gann caught on in the City in the late 1980s. Their chief virtue seems to be that they are understood by no-one, and so almost anyone can claim to be an expert in them without recourse.

gas bubble

A fundamental and usually long-lasting oversupply situation. A gas bubble typically is responsible for long-term depressed prices.

gas-gathering

Gas-gathering systems on oilfields typically are designed to stream off associated gas from the crude.

gasoil

An intermediate distillate product used for diesel fuel, heating fuel and sometimes as feedstock. In US parlance: No. 2 Heating Oil.

gasoline

Volatile motor fuel used in cars. See also octane number.

generation

The process of producing electricity by transforming other forms of energy such as steam, heat or falling water. Also, the amount of electricity produced, expressed in kilowatt-hours (kWh) or megawatt-hours (MWh).

A joule is an international unit of energy defined as the energy produced from one watt flowing for one second. A very small unit of energy, there are 3-6-mil joules in a kilowatt-hour. For gas, one gigajoule = 0.96 Mcf under standard temperature and pressure conditions. Roughly, one gigajoule (Gj) = 1 Mcf; one petajoule (Pj) = 1 Bcf; one exajoule (Ej) = 1 Tcf.

Green Investment Scheme. Schemes put in place by national governments to ensure that the proceeds from selling "hot air” under the Kyoto Protocol are used for environmental benefit.

GOB

Good Ordinary Brand. A grade of zinc, less pure than the LME-deliverable SHG grade.

gold loans

A form of debt financing whereby a potential gold producer borrows an amount of gold from a lending institution, sells the gold on the open market, uses the cash for company purposes (ie building a mine), then pays back the gold from actual mine production.

GOM or GM

Gasoil Moteur — French gasoil specification.

g-p

General purpose. Refers to a grade of polystyrene. Abbreviated as GP-PS.

grid

The layout of an electrical transmission system or a synchronized transmission network

Grosskrotzenburg

Lies just south of Frankfurt-am-Main. The single connection point between grids operated by RWE, PreussenElektra and Bayernwerk.

Group 3

Formerly three railroad companies in Tulsa, Oklahoma. Group 3 now refers to the pipeline price of petroleum commodities from Tulsa to Minnesota in the US.

HDA

Hydrodealkylation, a process used for making benzene from toluene.

head and shoulders

A reversal pattern characterized by a high, a higher high, a lower high, and a break below the line joining the lows between the highs, the so-called neck-line.

heap leaching

A process whereby valuable metals (usually gold and silver) are leached from a heap (or pad) of crushed ore by leaching solutions percolating down through the heap and are collected from a sloping, impermeable liner below the pad.

heavy crude oil

Has an API gravity of less than 28 degrees. The lower the API gravity, the heavier the oil.

heavy metals

Metallic elements with atomic numbers equal to or higher than uranium, used as a collective term to provide interdependence of the exact chemical form.

heavy water

Water containing significantly more than the natural proportion (1 in 6500) of heavy hydrogen (deuterium) atoms to ordinary hydrogen atoms. Heavy water is used as a moderator in some nuclear reactors.

hedge

The reduction of risk by covering anticipated commitments at a fixed price in the future through a futures or options contract. Buyers and sellers can hedge

Henry Hub

A pipeline interchange near Erath, Louisiana, where a number of interstate and intrastate pipelines interconnect through a header system operated by Sabine Pipe Line. It is the standard delivery point for the NYMEX natural gas futures contract in the US.

HFCs

Hydrofluorocarbons: A powerful group of greenhouse gases used as refrigerants.

highly enriched uranium

Any form of uranium with a uranium-235 concentration of 20% or higher. The 20% enrichment level has been established as a threshold above which material assumes particular importance from a non-proliferation standpoint and is subject to special legislation with regard to export licenses, physical protection and safeguarding.

HIPS

High-impact polystyrene.

HLS

Heavy Louisiana Sweet, a US crude oil.

HO

Heating oil. Number 2 heating oil is essentially the same product as gasoil.

Hormuz

The Strait of Hormuz is the sea-passage out of the Persian Gulf between Iran on the eastern shore and the UAE and Oman on the west.

"Hot Air"

An informal term for surplus Kyoto Protocol Assigned Amount Units. Some countries, notably the Russian Federation and Ukraine, hold a surplus of AAUs because those countries' national emissions fell due to economic decline after the fall of the Soviet Union.

HSFO

High sulfur fuel oil. Typically fuel oil containing 3.5% sulfur.

hub

A geographical location where multiple participants trade services.

hydroelectric plant

A plant in which the turbine generators are driven by falling water.

impedance

The opposition in an electrical circuit to the flow of alternating current (AC).

initial margin

The returnable collateral required to establish an options position.

inj

Abbreviation for injection grade in plastics.

in-lieu energy

Energy exchanged between a reservoir owner and the owner of a downstream project. The agreement allows reservoir owners to retain water above a reservoir's energy content curve; however, owners of downstream projects may request release of such water.

interconnection

Facilities that connect two electricity grid systems, gas pipelines or control areas.

Interconnector, (the European)

A 238-km pipeline providing a strategic link between the UK and continental Europe, connecting the two gas transmission systems at Bacton in the UK and Zeebrugge in Belgium. Capacity from the UK to Europe is 20-bil cu meters per year; from Europe to the UK about 9-bil cu meters.

intermediate load

The range from base load to a point between base load and peak. This point may be the midpoint, a percent of the peakload, or the load over a specified time period.

interruptible demand

The amount of customer demand that, in accordance with contractual arrangements, can be interrupted by direct control of the system operator, remote tripping, or by action of the customer at the direct request of the system operator.

interruptible gas

Gas sold to customers with a provision that permits curtailment or cessation of service at the discretion of the supplier.

in-the-money

An option which has intrinsic value. A put option is in-the-money when its strike price is above the value of the underlying futures contract. A call option is in-the-money when its strike price is below the value of the underlying futures contract.

intrinsic value

The value to an option holder if (s)he were to exercise an option today.

inverse head and shoulders

A bullish reversal pattern characterized by a low, a lower low, a less low low, and a breakout to the upside.

IPE

The International Petroleum Exchange in London.

IPP

Independent power producers - unregulated power generators which, unlike utilities, have no franchised retail service territories. Even a plant built by an investor-owned utility to serve its native retail load is not an IPP. It's still a utility plant. Also, utilities that form affiliates and build outside of their territories can be IPPs.

irradiated fuel

Nuclear fuel which has been loaded into a reactor and has undergone a sustained chain reaction.

isomer

A compound with the same chemical composition and molecular weight as another compound, but with a different molecular structure. For example: orthoxylene and paraxylene.

isomerate

Mixed xylenes used as gasoline blendstock. Made in an isomerization unit.

isomerization

Typically, the process of separating mixed xylenes into orthoxylene and paraxylene.

isotopes

Different forms of atoms of the same element. Each element has the same number of protons in its nucleus, but the number of neutrons varies in almost all elements and this determines the isotope.

IT

Interruptible transportation.

ITL

International Transaction Log. The UNFCCC's ITL tracks and verifies transactions of GHG allowances and offsets via national registries to ensure they are consistent with the Kyoto Protocol.

ITT

In-tank transfer.

JI

Joint Implementation: A UN scheme set up under the Kyoto Protocol to allow industrialized countries to invest in emissions reduction projects in other industrialized countries, in return for tradable greenhouse gas offset credits (ERUs).

JISC

The UN's Joint Implementation Supervisory Committee.

joint venture

Typically abbreviates to JV.

joules

A measure of energy equal to 1 watt second

kero

Kerosene.

kilowatt

One kilowatt equals 1000 watts. Abbreviates to kW.

kilowatt (kw)

A unit of electricity equal to one thousand watts.

kilowatt year (kw-y)

A unit of electrical capacity equivalent to one kilowatt of power used for 8760 hours.

kilowatt-hour

The basic unit for pricing electric energy, equal to one kilowatt of power supplied continuously for one hour (or the amount of electricity needed to light ten 100-watt lightbulbs for one hour). One kWh equals 1,000 watthours. One kWh = 3.306 cu ft of natural gas. An average household will use between 800-1300kWh/month.

kt

Abbreviation for one thousand tonnes.

Kyoto Protocol

A treaty of 163 countries, created in 1997. It requires 35 industrialized countries to reduce emissions of six greenhouse gases by at least 5% overall from 1990 levels by 2008-2012. Kyoto entered into force February 16, 2005.

lambda

The measure of the rate at which fuel is consumed relative to electric output, expressed in Btu's per kWh.

landed cost

The total cost of oil off-loaded at a port, including duties, fees and taxes.

Laufenburg

An electricity delivery hub in Switzerland, divided between Laufenburg National and Laufenburg International.

laycan

The range of dates during which a ship will load.

lb

Pound, unit of measurement for a number of metals and petrochemicals, eg cts/lb, lb/year.

lending

In a futures market, selling a nearby contract while at the same time buying an equivalent forward contract. The opposite strategy, buying nearby and selling forward, is known as borrowing.

The act of loading petroleum or petroleum products at a terminal or transfer point.

light crude oil

Has an API gravity higher than 33 degrees. The higher the API gravity, the lighter the crude oil.

light ends

Group of petroleum products with the lowest boiling temperatures, including gasolines and distillate fuels.

lignite

A brownish-black coal of low rank with high inherent moisture and volatile matter (used almost exclusively for electric power generation). It is also referred to as brown coal.

liquefied natural gas

See LNG.

liter

A liter is 1,000th of a cubic meter. There are 3.78541 liters in a gallon. Convert to barrels instead. One thousand liters=6,289.8 bbl.

LLS

Light Louisiana Sweet. A US crude oil.

LME

London Metal Exchange.

LNG

Liquefied natural gas. Natural gas converted to a liquid state by pressure and severe cooling, then returned to a gaseous state to be used as fuel. Acceptable first reference abbreviation. LNG is moved in tankers, not via pipelines. LNG, which is predominantly methane, artificially liquefied, is not to be confused with NGLs, natural gas liquids, heavier fractions which occur naturally as liquids. See also natural gas, NGL, LPG.

load

The amount of electricity delivered or required at any specific point or points on a system. The load of an electricity system is effected by many factors and changes on a daily, seasonal, and annual basis, typically following a pattern. System load is usually measured in megawatts (MW).

load curve

A curve of power versus time showing the level of a load for each time period covered. The horizontal axis is time and the vertical access is load (MW).

load factor

The ratio of average load to peak load during a specific period of time, expressed as a percent. The load factor indicates to what degree energy has been consumed compared to maximum demand or the use of units relative to total system capability. An system's load factor shows the variability in all customers' demands.

load management

The management of load patterns in order to better use the system. Generally, load management attempts to shift load from peak use periods to other periods of the day or year.

load shape

Variations in the power load over a daily, weekly or annual period.

loaning

Allowing a customer to take gas and return it at a future state. Usually a service provided at a market hub.

long

Traders are said to be long when they have contracted to buy more of a commodity or instrument than they have contracted to sell.

long-run marginal costs

All costs associated with the lowest cost incremental unit including variable production costs and capital costs.

loop flow

The tendency of electricity to flow along the path of least resistance, which may not necessarily be the same as that intended in the contract between the two transmitting entities. If power sold along a contractual path goes a different physical path, the power-flow may interfere with control of the systems which were unaware of the contractual power transfer.

loss of load probability (lolp)

A measure of expectation that system demand will exceed capacity during a given period, often expressed as the expected number of days per year.

LPG

Liquefied petroleum gas, typically ethane, propane butane and isobutane. Usually produced at refineries or natural gas processing plants, including plants that fractionate raw natural gas plant liquids. LPG can also occur naturally as a condensate.

A trend following momentum indicator that maps the difference between two exponential moving averages, the 26 and 12-day. A nine-day exponential moving average is plotted on top of this as a 'signal' line to show buy/sell opportunities.

marginal cost pricing

A system of pricing designed to ignore all costs except those associated with producing the next increment of power generation. Sometimes referred to as incremental cost pricing.

marginal price of energy

Price for power from a unit which is already running. (System Lambda + markup).

market-area storage, or hub

Storage facilities or hub located near gas users (markets).

market on close

An order to buy or sell a specified amount of futures contracts at the price when the market closes.

Platts' market-on-close (MOC) is a price-discovery system designed to yield a price assessment reflective of market values at the close of the typical trading day. Systems of similar nature are very common, with variants seen in the futures markets where the energy and financial exchanges publish daily settlement prices reflective of activity at the close of markets. The MOC process is a very structured system for information gathering that allows transparent and fully verifiable market information to form the basis of the daily price assessment.

MOC is a time-tested method for deriving price benchmarks that reflect market value and Platts has provided these benchmarks to global energy markets across Asia, Europe, the Middle East, and Africa for more than a decade.

The MOC pricing system recognizes as a core principle that price is a function of time and MOC enables Platts to have full clarity on the price at the close of business. Because price is a function of time, market assessments reflect values at a defined point in time, allowing both outright and spread values to be properly reflected.

mark-to-market

This is a process used to determine the fair value of forward contracts and commodity inventories at a specific point in time. Contract prices are compared with the current forward prices for delivery during respective periods along the forward price curve. The present value of the differences is the mark-to-market value. Positive values are reported as assets and negative values are reported liabilities in accounts. Accounting standards and regulatory guidelines require fair value (mark-to-market) accounting in many jurisdictions.

mcf

One thousand cubic feet of natural gas.

Med

Market abbreviation for Mediterranean.

megawatt (mw)

A unit of electrical power equal to one million watts or one thousand kilowatts.

megawatt-hour (mwh)

One million watt-hours of electricity. A unit of electrical energy which equals one megawatt of power used for one hour.

mmbtu

One million British thermal units.

mmcf

One million cubic feet of natural gas.

MMS

The US Minerals Management Service, an agency of the Interior Department.

moderator

A component of some nuclear reactor types which slows neutrons, thereby increasing their chances of fissioning fissile material.

mogas

Used in some markets as a substitute term for gasoline.

momentum

The simple difference between the price now and the price N days ago. Momentum is negative if the price now is below the price N days ago, and positive if it is above.

MON

Motor Octane Number. See octane number.

MOP

Meeting of Parties to the Kyoto Protocol. Usually held in conjunction with the COP (Conference of Parties to the UNFCCC).

MOPAG

Mean of Platts AG. The mean of the high and low components of a Platts assessment for oil cargoes loading from the Persian Gulf (Arab Gulf). Often used as a component in floating price deals.

MOPS

Mean of Platts Singapore. The mean of the high and low components of a Platts assessment for oil cargoes loading from Singapore. Often used as a component in floating price deals.

mothball

To place a generating facility in an inactive state so that it can neither be brought into operation immediately nor counted towards reserve margin

moving average

The mean of prices over a pre-defined period, for instance, the previous five days. The moving average for different time periods can be charted to generate short- and medium-term buy/sell signals. For instance, funds have in the past tended to buy when the price crosses the 40-day moving average from below, and to sell when it cuts the average from above.

moving average crossover

The point where a short moving average crosses a longer-moving average. These are often taken as buy or sell signals. When the shorter MA crosses the longer from below and both are turning upwards, it is called a Golden Cross, a strong buy signal.

moving average envelopes

Envelopes use moving averages which are sifted up or down by a certain percentage to establish a certain 'normal' band in which the price moves. If prices break out of these, they tend to revert to the mean.

A utility owned and operated by a municipality or group of municipalities

N&A

Naphthenes and aromatics.

N2O

Nitrous Oxide. A powerful greenhouse gas, also once known as ‘laughing gas' due to its euphoric effect when inhaled.

nameplate capacity

The full-load continuous rating of a generator or other electric power production equipment under specific conditions as designated by the manufacturer. Installed generator nameplate rating is usually indicated on a nameplate physically attached to the generator

NAP

National Allocation Plan: Under the EU ETS, each country must submit a NAP to the European Commission, detailing every installation/plant and its proposed allocation of emissions allowances within the national cap.

naphtha

Straight-run gasoline fractions. Used as a feedstock for reforming and as a petrochemical feedstock.

naphthenic

High in naphthenes.

naphthenic naphtha

Favored form of reformer feedstock naphtha.

National Balancing Point

An imaginary point on the UK Transco pipeline through which all gas is deemed to flow, and about which all gas is balanced. NBP is the delivery point for the IPE's natural gas futures contract.

National Energy Board

The Canadian regulatory body which oversees interprovincial natural gas trade and pipelines. Located in Calgary, Alberta.

natural gas

Naturally occurring gas, predominantly methane, but usually containing some proportions of ethane, propane and butane. Natural gas can be either associated gas or non-associated.

natural gas

A naturally occurring mixture of hydrocarbon and non-hydrocarbon gases found in porous geological formations beneath the earth's surface, often in association with petroleum. The principal constituent is methane

New Entrant Reserve: An amount of EUAs set aside under the EU ETS to allow for new CO2 emitting facilities.

net capability

The maximum load-carrying ability of a power plant under specified conditions for a given time interval. Capability is determined by design characteristics, physical conditions, energy supply and operating limitations such as cooling and circulating water supply and temperature, headwater and tailwater elevations, and electrical use

net generation

Gross generation less the electric energy consumed at the generating station for station use.

net smelter return

The interest in a mining property held by the vendor on the net revenues generated by the sale of the metal produced by the mine.

network

An interconnected system of electrical transmission lines, transformers, switches and other equipment connected in such a way as to provide reliable transmission of electricity.

NGL

Natural gas liquids. Can include ethane, propane, butane, isobutane and natural gasoline/condensate. Not to be confused with LNG, liquefied natural gas. LNG is artificially liquefied methane, not the heavier fractions defined as NGLs.

nuclear fuel

All fissile material in any chemical form and the hardware required to produce fuel for a reactor.

nuclear fuel

Fissionable materials that have been enriched to such a composition that, when placed in a nuclear reactor, will support a self-sustaining fission chain reaction, producing heat in a controlled manner for process use

nuclear power plant

A facility in which heat produced in a reactor by the fissioning of nuclear fuel is used to drive a steam turbine

nuclear reactor

A device in which a fission chain reaction can be initiated, maintained and controlled. Nuclear reactors are used in the power industry to produce steam for electricity

nuclear waste

Radioactive substances generated at different stages of the nuclear fuel cycle, which are considered to have no further potential use.

NWE

Oil and petrochemicals market abbreviation for Northwest Europe.

NYH

New York Harbor.

NYMEX

New York Mercantile Exchange. Also known in the energy industry as "the NY Merc".

o/r

Operating rate.

octane number

A measure of the detonative quality of gasoline, or otherwise expressed its tendency to cause "engine knock." The higher the octane number, the higher the resistance to engine knock. Octane numbers come in two forms: Research octane number reflects fuel performance under moderate driving conditions, while the tests for motor octane number reflect high speed driving conditions. Tests for both numbers are in fact performed in the laboratory.

offer

An indication of willingness to sell a specified amount of a commodity at a specific price

off-peak

Light load hours. The time of the day when an power system would experience its lightest load, usually in the middle of the night

offset

An offset deal is, normally, one in which a vendor government "offsets" the cost of an arms sale to a purchaser government by undertaking to invest in the purchaser country (or to persuade vendor country companies to do so). Offset investment is normally not in the arms sector, and typically involves technology transfer.

Ofgem

UK regulatory body which oversees electricity and gas trade, pipelines and the power grid. Located in London. Combines the former Offer and Ofgas regulators.

ohm

The unit of measurement of electrical resistance. The resistance of a circuit in which a potential difference of 1 volt produces a current of 1 ampere

olefins

Class of double-bonded aliphatic hydrocarbons made by cracking naphtha, LPG or gasoil at high temperatures. Occur in gaseous form. The main olefins are ethylene and propylene.

On Balance Volume

OBV is a momentum indicator relating volume to price change. If prices rise, volume is considered up-volume; if price, it is considered down-volume. Up-volume is added to the cumulative total, and down-volume is subtracted.

OPEC

Full name is The Organization of the Petroleum Exporting Countries. Group of crude-producing countries which has used its collective weight of production since OPEC was founded in 1960 in an attempt to influence oil prices. Current membership (May 2000): 11 countries—Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, Venezuela. Ecuador resigned from OPEC in 1992, Gabon in 1995. Founder members were Saudi Arabia, Iran, Iraq, Kuwait and Venezuela.

open interest

The number of contracts left open in a market which need to be closed out or taken through to delivery

open interest

Open interest is the number of open contracts on a given future or options contract. Longs or shorts that have not been closed out are OI. Short-covering/profit-taking will tend to reduce OI.

open outcry

A trading system in which members trade verbally on a trading floor

open pit

A surface mine, open to daylight, such as a quarry. Also referred to as open-cut or open-cast mines.

operating reserve margin

The amount of unused available capability that can be applied to the system within ten minutes at peakload for a utility system, expressed as a percentage of total capability

optimization

A technique used by technical analysts to decide on which measures work best in their specific markets. For instance, the 40-day moving average might generate good signals for oil and commodity markets, but not foreign exchange markets. BY using optimization software, traders hope to work out which measures work well for their specific instruments.

options contract

A contract that gives the purchaser the right, but not the obligation, to buy or sell the underlying commodity at a certain price on or before an agreed date.

option pricing model

Mathematical models that use certain "knowns” in the present, like underlying price, strike price and days until expiration, along with forecasts (or assumptions) for factors such as future volatility, to compute the theoretical value for options in the future. Variables can fluctuate over the life of the option, and the option's theoretical value adapts to reflect these changes. Models include the Black-Scholes formula, binomial model, or simulation (so-called Monte Carlo models). These models vary in the amount of assumptions they make about things like the distribution of future prices, and if inputs can change over time in the future as well.

oscillator

The difference between two indicators. For instance, a moving average oscillator would reflect the difference between two moving averages. The oscillator ranges around a single line.

out-the-money

An option which has no intrinsic value. A put option is out-of-the-money when its strike price is below the value of the underlying futures contract. A call option is out-of-the money when its strike price is above that of an the underlying futures contract

out-turn

The quantity of oil unloaded from a vessel at its discharge point. Out-turn pricing allows the buyer to pay only for the oil measured into receiving tanks. The amount of oil loaded on the tanker becomes irrelevant. See also CIF, FOB, C+F, FCA etc

over-the-counter

This is a customized derivatives contract typically transacted through an intermediary such as bank or trading wing of an energy company rather than on a formal, more centralized stock exchange. Swaps are the most common form of over-the-counter instrument.

oxygenate

Oxygen-containing blend stocks favored for their octane and their clean burning quality. Oxygenates Include MTBE and ethanol.

oxygenated gasoline

Gasoline containing more oxygen than pre-1990s formulation. Oxy-specified gasoline in the US contains 2% oxygen, and is intended for use in winter months in northern US states. reformulated gasoline contains 2.7% oxygen, and is designed for year-round use in metropolitan areas.

P&C

Private and confidential. Used by commodities traders to describe non-public transactions.

P/C

Part-cargo.

PADD

Petroleum Allocation for Defense District. A group of five geographic areas in the US used in reference to petroleum distribution.

paraffinic

High in paraffins

paraffinic naphtha

Favored quality of naphtha for ethylene plant feedstock.

parking

Providing a customer with temporary gas storage, typically at a market hub.

peak demand

The maximum load during a specified period of time

peak load

The maximum electrical load demand in a stated period of time. On a daily basis, peak loads occur at midmorning and/or in the early evening

Perfluorocarbons: A group of powerful greenhouse gases used in high voltage electrical insulation, medical applications and other uses.

PFG

Abbreviation of German pfennig, 1/100th of a Mark.

physical delivery

The transfer of ownership of an underlying commodity between a buyer and seller to settle a futures contract following expiry.

pl

Pipeline.

plutonium

An element with atomic number 94 formed as a by-product of nuclear fission in reactors. Plutonium has several isotopes, the most common of which is plutonium-239.

point-and-figure

A charting system which ignores time and displays only the main price changes. They comprise alternate columns of 0s(falls) and Xs (gains). Parameters used are box-size and reversal size.

polymers

Plastics made from monomers. The most common include widely traded plastics like polyethylene, polypropylene and polystyrene.

pooling point

The place where natural gas is aggregated from many receipt points to serve a number of contracts without tying a particular receipt point to a particular contract.

postage stamp rate

A rate for electric transmission that does not vary according to distance from the source of the power supply. So-called because postage stamps for letters are typically at a fixed price, regardless of destination.

posted price

Outright, non-market-related price requested by a seller of crude oil or products. Effectively, the list price.

pour point

Lowest temperature at which oil will readily flow without disturbance when chilled.

power purchase agreement

A contract involving the purchase and sales of electricity, which is normally executed between the owner of a power plant generating the electricity and the buyer of the electricity a regulated utility, local distribution company, or private sector industrial manufacturer.

ppm

Parts per million. Typically used to designate amount of metals or other impurities in refined oil products.

PPT

See prompt.

prem

Abbreviation for Premium.

premium

An additional amount agreed between buyer and seller over and above an existing benchmark. Also, the price paid by an option holder to an option grantor.

price cap

A method of setting a utility distribution company's rates where a maximum allowable price level is established by regulators, flexibility in individual pricing is allowed, and where efficiency gains can be encouraged and captured by the company

primary/secondary

In metals, primary metal refers to metal produced from mined ore, as opposed to secondary metal, which is produced from secondary sources, mainly scrap

prime mover

The engine, turbine, water wheel or similar machine that drives an electric generator; or, for reporting purposes, a device that converts energy to electricity

Abbreviation for Premium.

prompt

A prompt cargo describes a cargo available for immediate lifting (one to two days). Prompt tonnage refers to tankers available to lift cargoes immediately. The tanker and petrochemical world's abbreviation is PPT.

proxy hub

Natural gas and power hub locations where there is little or no forward trading activity. Platts' uses analysis and statistical testing to establish a defendable relationship between a proxy location and one of the editorial or market locations.

PRT

Britain's Petroleum Revenue Tax.

pumped-storage hydroelectric plant

A plant that generates electricity by using water pumped during off-peak periods into an elevated storage reservoir. At peak periods, when additional generating capacity is needed, the water is released from the elevated storage reservoir to turbine generators in a power plant at a lower elevation. A hydroelectric power plant that uses both pumped water and natural stream flow to produce electricity is a Combined Pumped-Storage Hydroelectric Plant.

put option

An option that gives the holder the right (but not the obligation) to sell a specified quantity of the underlying instrument at a fixed price, on or before a specified date. The grantor of the option has the obligation to take delivery of the underlying instrument if the option is exercised.

puts/calls ratio

The ratio of puts to calls in an options market.

pygas

Pyrolysis gasoline: a naphtha-range product with a high aromatic content, used either for gasoline blending or as a feedstock for a BTX extraction unit. Pygas is produced in an ethylene plant which processes butane, naphtha or gasoil.

Qua Ibo

A Nigerian crude oil, with an API of about 35.9.

quota

OPEC sets individual crude oil production quotas for each of its 11 members. These quotas do not include condensate production.

R+M/2

Research Octane Number plus Motor Octane Number divided by 2, also known as the "anti-knock index." See octane number.

rack price

The price of petroleum products at a refinery loading rack. Rack-pricing is effectively cash and carry at the rack.

radioactive decay

The spontaneous nuclear transformation in which an atom emits particles or radiation following orbital electron capture, or when the nucleus undergoes spontaneous fission. When several such transformations occur in series, this is called a decay chain.

raffinate-1, raffinate-2

By-products of butadiene extraction, the former being a key feedstock in production of MTBE.

rally

A rapid rise in a price.

random walk

Theory that market prices move randomly around a main trend, in other words, that the volatility is arbitrary.

Rate of Change of Prices

This is a simple momentum-type indicator. It is the simple momentum over n days divided by the price n days ago.

reactor types

Nuclear reactors may be divided into two main types, fast and thermal. A fast reactor is a reactor in which the fission chain reaction is sustained with high-energy or high-speed (ie fast) neutrons. It is capable of converting unused fertile uranium-238 into fissile plutonium, a process known as breeding on fast breeder reactors A thermal reactor is a reactor in which the fission chain reaction is sustained with moderated (slow or "thermal") neutrons. There are four main types in use: light water reactors, which account for over 90% of those in operation; CANDU pressurized heavy water reactors; gas-cooled reactors (GCR, and ACR); and the RBMK light water graphite reactor.

REC

Regional electric company. Term used in the UK to describe producers of electricity in the county’s specific regions. Also sometimes refers to owners of transmission assets.

re-enrichment

Enrichment of uranium previously enriched or depleted.

ref

Market abbreviation for refinery, used for example in contracts specifying material sold ex-refinery: ex-ref.

refinery

In oil, a plant, usually comprising distillation units and a variety of additional specialist units, for the manufacture of so-called refined products from crude oil. Major refined products include naphtha, gasoline, gasoil (heating oil), jet fuel, low sulfur and high sulfur fuel oil.
In copper and lead, a refinery is a plant which further purifies metal produced in a smelter. In zinc, it is a plant which produces purer metal than could be produced in a smelter. In aluminum, it denotes a plant which refines bauxite into alumina.

Reforestation

Re-establishing a forest by planting or seeding an area where forest vegetation has been removed (see also afforestation).

reformate

A high-aromatic, high-octane product made in a reformer and used to blend motor gasoline or aviation gasoline.

reg

Abbreviation for Regular gasoline. Usually leaded.

reg unl

Abbreviation for Regular unleaded gasoline.

regassification point

A plant the accepts deliveries of liquefied natural gas (LNG) and processes it back to gaseous form for injection into the pipeline system.

Relative Strength Index

This has become one of the most widely used and popular of technical indicators. It was invented by Welles-Wilder, and uses a simple equation comparing the average up moves in the market to the average downmoves to give a single RSI number for a certain period. The 14-day RSI is widely used. RSIs of 20-30% tend to indicate the market is oversold, while those of 70-80% indicate it is overbought.

renewable source

A power source that is continuously or cyclically renewed by nature. Solar, wind, hydroelectric, geothermal and biomass electricity generation are example of renewable energy sources.

reserve capacity

Extra generating capacity available to meet unanticipated demands for power or to generate power in the event of loss of generation

Reserves

The calculated quantity of hydrocarbons or minerals which can be extracted profitably from a deposit, classified according to the level of confidence that can be placed in the data. Standard classifications are:
Proven reserves – Reserves that have been sampled extensively, for example--in mining--by closely spaced diamond drill holes or by underground working giving an accurate picture of size and quality of reserves. Also called measured reserves. In oil, proven reserves are an estimate based on seismic and other exploratory data, linked to an assessment of economic and operating viability.
Recoverable reserves – In oil and gas, the portion of a field’s total estimate reserves that can actually be recovered from the field using currently available technology. Recoverable reserve estimates are dependent on factors such as reservoir pressure and the density of strata.
Probable reserves – Valuable mineralization not sampled enough to estimate accurately the terms of tonnage and grade. Also called indicated reserves.
Possible reserves – Valuable mineralization not sampled enough to estimate accurately its tonnage and grade, or even verify its existence. Also called inferred reserves. In oil, possible reserves are an estimate of reserves from an undrilled site or one that has not bee seismically tested.

reservoir

In oil, a naturally occurring geological formation containing hydrocarbon. In power, a structure (usually a dam) which stores water for later use in the production of electricity.

resids

Oil market jargon for residual fuel oils.

resistance

A price at which sellers are likely to enter the market in an uptrend.

retail competition

See domestic competition.

retracement

A temporary move in the opposite direction to that of the main trend. These are often

reverse tolling

When a gas pipeline recalls gas used for electric generation and diverts it to end-use markets when gas prices are higher than power prices.

RFG

Reformulated gasoline. US specified gasoline formulated with a higher oxygen content than pre-1990s gasolines. RFG is specified to contain 2.7% oxygen, and is designed for year-round use in urban areas. So-called oxygenated gasoline is specified with a 2% oxygen content, and is intended for winter use. The abbreviation RFG is acceptable in headlines and on first reference in market reports.

RINs

A Renewable Identification Number (or RIN) is a serial number assigned to a batch of biofuel for the purpose of tracking its production, use, and trading as required by the United States Environmental Protection Agency's Renewable Fuel Standard implemented according to the Energy Policy Act of 2005.

RNR

Tanker abbreviation for rate not reported.

risk disaggregation

An identification of specific risk components within transactions, assets, and contracts. This activity may use a mathematical technique to assess the likelihood of a potential adverse outcome.

roll over

The transfer of a position from one futures period to another involving the purchase (sale) of the nearby month and simultaneous sale (purchase) of a further-forward month.

RON

Research octane number. See octane number.

run-of-river plant

A hydroelectric plant which depends chiefly on the flow of a water stream as it occurs for generation. Differs from a storage project (such as a hydroelectric dam), which has space available to store water from one season to another. Some run-of-river projects have a limited storage capacity (pondage) which permits them to regulate streamflow on a daily or weekly basis.

RVP

Reid Vapor Pressure, a measure of a gasoline's volatility.

s/d

Occasionally used abbreviation for shutdown.

salting

The act of introducing metals or minerals into a deposit or samples, resulting in false assays, done either by accident or with the intent of making fraudulent claims about a deposit’s value.

secondary market

In natural gas, the trading of transportation capacity.

settlement price

A price established at the close of a trading day used to calculate the settlement of futures contracts.

SF6

Sulphurhexafluoride: A powerful greenhouse gas used in high voltage electrical insulation, and in medical applications, among others.

short

Traders are said to be short when they have contracted to sell more than they contracted to buy.

SIMEX

The Singapore Monetary Exchange.

smelter

In copper, lead, and zinc, a plant which reduces concentrate to metal. In aluminum, a plant which upgrades alumina into metal.

solar generation

The use of the sun’s radiation to generate electricity.

solvent extraction-electrowinning

A metallurgical technique, so far applied only to copper ores, in which metal is dissolved from the rock by organic solvents and recovered from solution by electrolysis.

sour/sweet crude

Definitions which describe the degree of a given crude's sulfur content. Sour crudes are high in sulfur, sweet crudes are low.

sour/sweet gas

Sour gas is natural gas which contains lethal hydrogen sulfide, and must be purified before being injected into a pipeline. Sweet gas is gas found in its natural state which does not need to be purified to remove sulfur-bearing compounds.

spark spread

Basically, the cost difference of converting natural gas into electricity. It can also be the difference between gas and electricity futures prices. Marketers use the spark spread as an arbitrage opportunity, using tolling or reverse tolling.

spill

Release of water from a reservoir over a spillway rather than putting it through turbines to generate electricity. A spillway is the overflow structure of a dam

spinning reserve

Unused capacity available from units connected to and synchronized with the grid to serve additional demand. The spinning reserve must be under automatic control to instantly respond to system requirements.

spot market

A market where goods are traded for immediate delivery.

SPR

Strategic Petroleum Reserve in the US.

spread

The difference between two prices, either across time or between commodities or instruments.

spread (options)

An option trade in which two or more open positions are established in order to trade the differentials and offset risk. Option spreads may use different strike prices and/or expiry dates.

Spread-trading

Buying one instrument/commodity and selling another, with a view to profiting from the change in the gap between the two markets.

A thermal electricity generating plant which creates steam to drive a turbine.

stochastics

The theory of stochastics is based on the premise that prices close nearer the high in an uptrend, and nearer the low in a downtrend. %D Slow %D %K %R are all just names for different ways of smoothing the stochastic measures derived from the uptrend/down

storage

In oil: typically onland tankage facilities for short- or long-term storage of crude or products; sometimes used in economic parlance interchangeably with the concept of oil stocks.
In natural gas: facilities used to store natural gas which has been transferred from its original location. Usually consists of natural geological reservoirs like depleted oil or gas fields, water-bearing sands sealed on top by an impermeable cap rock, underground salt domes, bedded salt formations, or in rate cases, abandoned mines.

straight run

Material which has come straight from an atmospheric distillation unit and has not been cracked or reformed, and which is usually used as a feedstock or as a utility fuel.

stranded investment/stranded costs

An investment with a cost recovery schedule that was initially approved by regulatory action that subsequent regulatory action or market forces has rendered not practically recoverable. Costs that utilities are currently permitted to recover through their

stress testing

A test to simulate an extreme market event and examine what happens to prices under the stress of that exercise.

strike price

The price at which an option holder has the right to buy or sell an underlying commodity/derivative.

substation

Facility equipment that switches, changes, or regulates electric voltage. An electric power station which serves as a control and transfer of power flow, transform voltage levels, and serve as delivery points to industrial customers.

superconductivity

The flow of electric current without resistance in certain metals and alloys at temperatures near absolute zero. Perpetual motion on an atomic scale; the conduction of electricity without the slightest power loss; perfect conductivity.

superconductor

A material that becomes a perfect conductor of electricity when chilled. Developments beginning in 1986 have raised the threshold temperature to levels which, in the near future, may provide wires capable of conducting large electric currents without line

support

A price at which buyers are likely to start buying in a downtrend.

surplus energy

Energy generating capability that is beyond the immediate needs of the producing system. This energy may be sold on an interruptible basis or as firm power.

susp

Suspension grade PVC.

switching station/switch yard

Facility used to tie together two or more electric circuits through switches. The switches are selectively arranged to permit a circuit to be disconnected, or to change the electric connection between the circuits

swaps contract

Agreement between two parties whereby a notional amount is exchanged between two parties. The first party pays floating price and the other one pays a fixed price over a specified period of time.

synthetic natural gas

Energy-rich vapors manufactured from coal.

system lambda

The marginal, variable production cost of electricity at a given level of system output.

system operator

A person or entity who operates the electric system .

t/a

Abbreviation for Turnaround.

t/c

Tanker market abbreviation for timecharter.

tailings

Material rejected from a mill after most of the recoverable valuable minerals have been extracted. Confined in a tailings pond, the main function of which is to allow enough time for heavy metals to settle out or for cyanide to be destroyed before water is discharged into the receiving watershed.

take-or-pay

A clause in a gas supply contract which provides that a minimum quantity of gas be paid for, whether or not delivery is accepted by the purchaser. Most contracts contain a time period in which the buyer may take later delivery of gas without penalty. Not generally included in contracts written today. Some buyers will pay the seller a fee (often large) to buy out the contract (usually an old contract), so they are not required to take the gas. Often abbreviated to TOP by companies, but should be written in full.

A unit of heating value equal to 100,000 Btus, in common use in the UK. Roughly, you can get 56 therms by setting fire to a barrel of crude oil. The dekatherm, 10 therms, is a more commonly used unit in the US.

thermal generation

The production of electricity from plants that convert heat energy into electrical energy. The heat in thermal plants can be produced from a number of sources such as coal, oil, gas or nuclear fuel

thorium

An element with atomic number 90. It may be used as a fertile material in a nuclear reactor as the irradiation of thorium-232 with neutrons produces uranium-233, an artificial fissile material like plutonium-239.

throughput

The volume of gas flowing through a pipeline, ore processed by a concentrator etc.

tiered rates

A rate design which divides customer use into different tiers, or blocks, with different prices charged for each.

time value

The time component in a premium for an option art. Typically the time value of an option declines as it moves closer to expiry.

timecharter

The chartering of a tanker or other freight vessel for a period of time rather than for a specific voyage.

tolling arrangement

An arrangement whereby a party moves fuel to a power generator and receives kilowatt hours (kWh) in return for a pre-established fee.

tolling fee

A fee paid for use of electric generation assets used to convert fuel to power.

tonne

The standard Platts abbreviation is mt.
A tonne, or metric ton, sometimes tautologically referred to as a metric tonne, is defined as the weight of one cubic meter of water. Rough-and-ready barrel-tonne conversion factor is 7.33 barrels of crude to one tonne, but obviously depends on the specific gravity of the crude.

transformer

An electrical device for changing the voltage of alternating current.

transmission

The network of high voltage lines, transformers and switches used to move electricity from generators to the distribution system. Also used to interconnect different utility systems and independent power producers together into a synchronized network. Transmission is considered to end when the energy is transformed for distribution to the consumer.

transmission loss

The power lost in transmission between one point and another. It is measured as the difference between the net power passing the first point and the net power passing the second point .

The fee paid by a miner to the smelter/refiner which upgrades the mine’s concentrate output. Abbreviated to TC/RCs on second reference. Smelting/refining contracts also typically include escalators, which adjust the charges up or down in line with fluctuations in the market price of the metal in question. See also Custom smelter.

trend

"The trend is your friend." A trend at its most basic consists of a situation in which prices move more in one direction than another. Many technical measures attempt to discern when a price is moving in a trend, punctuated by minor corrections, and when it is simply trendless.

trend lines

Lines drawn on a price chart linking subsequent lows in a downtrend and subsequent highs in a uptrend.

triangle

Chart pattern. Prices trade sideways after a main trend, and the range gets smaller each day.

triple bottom

A bullish reversal pattern characterized by three highs at roughly equal value.

triple top

A bearish reversal pattern characterized by three highs at roughly equal value.

turbine

The part of a generating unit usually consisting of a series of curved vanes or blades on a central spindle, which is spun by the force of water, steam or hot gas to drive an electricity generator.

turnaround

A refinery or petrochemical plant is said to be "in turnaround" when it is taken out of service of maintenance, usually planned.

TVA

Temporary voluntary abatement. The producer/seller agrees to suspend a nominated price increase. Often used in the US petrochemicals market.

TVA (2)

Tennessee Valley Authority.

two-part rate

A charge for electricity consisting of a demand (kW) component and an energy or commodity (kWh) component.

UKC

UK-Continent. Tanker market term for the UK and northwest European region closest to it

ULCC

Ultra large crude carrier; with a capacity of 320,000-600,000 dwt. See tankers.

Unconventional gas

Natural gas that cannot be produced using current technologies.

uncovered position (futures)

Where a long market player has bought more of a commodity than he has agreed to sell, or where a short market player has sold more of a commodity than (s)he has to deliver

uncovered position (options)

When the grantor of an options position has no cover in the underlying futures market against a price swing in the holder's favor (see delta hedging).

UNFCCC

United Nations Framework Convention on Climate Change: An international treaty signed in 1992, of which the Kyoto Protocol is an amendment. As of December 2009, the UNFCCC comprised 193 parties.

The heaviest naturally occurring element (atomic number 92). It is metallic and slightly radioactive. Its only substantial use today is as a raw material for generating electricity via nuclear fission. Ranging in atomic mass from 227 to 240, uranium has 14 isotopes, of which only three occur naturally: uranium-238, uranium-235, and uranium-234.
Uranium-238 – comprises 99.283% by weight of natural uranium (ie uranium whose isotopic composition, as it occurs in nature, has not been altered)and is not fissile, but is fertile. It usually absorbs any neutrons which strike it and as a result is transformed into plutonium-239, a fissile isotope of plutonium.
Uranium-235 – the only naturally occurring isotope of uranium which is capable of fission. Natural uranium contains approximately 0.711% by weight of uranium-235.
Uranium-234 – exists in very small quantities in natural uranium (0.005% by weight) and is not fissile in thermal reactors.
The remaining isotopes are created synthetically. Uranium-233 is fissile and is obtained by the irradiation of thorium-232 with neutrons. Uranium-232, -236, and –237 are found in irradiated nuclear fuel and are not fissile.

USAC

Tanker abbreviation for US Atlantic Coast.

USEC

Petrochemical markets abbreviation for US East Coast.

USG

Tanker and market abbreviation for United States Gulf, more properly known as the Gulf of Mexico.

USWC

Tanker and market abbreviation for US West Coast.

Value at Risk (VaR)

A widely used risk measure of the maximum loss a specific portfolio of financial assets can sustain over some period with a certain probability. For a given portfolio, probability, and timeframe, the VaR is defined as a threshold value such that the probability that the mark‐to-market loss on the portfolio over the given time horizon would not exceed this value.

vanadium

Metal present in some fuels. Vanadium content is one specification for measuring cargo quality. Vanadium is traded in two forms – vanadium pentoxide (V2O5), and ferrovanadium.

var

Voltage-Ampere-Reactive. A measure of reactive power.

variable costs

Voltage-Ampere-Reactive. A measure of reactive power.

variation margin

Profits and losses on open positions which are calculated daily by the mark-to-market process, which are then paid or collected daily.

VERs

Verified Emissions Reductions. Voluntary greenhouse gas emissions reduction credits. VERs cannot be used for Kyoto compliance -- they have value only in terms of public relations/corporate social responsibility and as part of voluntary cap-and-trade schemes.

VGO

Vacuum gasoil, also known as catfeed. Feedstock for fluid catalytic crackers used to make gasoline, gasoil and other by-products.

viscosity

Measure of a liquid's resistance to flow. There are a number of viscosity scales in current use.

VLCC

Very large crude carrier; with a capacity of 200,000-320,000 dwt. See tankers.

volatility (Chaikin's)

Calculate the exponential moving average of the difference between the daily high and low, lets call this 'range'. Volatility = range now minus range n days ago / range n day's ago.

volatility (historical volatility)

The degree to which a particular price has fluctuated in the past

volatility (options)

A value attributed to an underlying futures contract which determines the premium that is set by the grantor. Includes an element of historical volatility, and the volatility which the grantor of an option believes will still be seen in that futures contract.

volt

The unit of measurement of electromotive force. It is equivalent to the force required to produce a current of one ampere through a resistance of one ohm. The unit of measure for electrical potential. Generally measured in kilovolts or kV. Typical transmission level voltages are 115 kV, 230 kV and 500 kV.

voltage control

The control of transmission voltage adjustments in generator reactive output and transformer taps, and by switching capacitors and inductors on the transmission and distribution systems

voltage reduction

Any intentional reduction of system voltage by 3 percent or greater for reasons of maintaining the continuity of service of the bulk electric power supply system.

watt

A measure of real power production or usage equal to one Joule per second. The rate of energy transfer equivalent to 1 ampere flowing under a pressure of 1 volt.

watt hour (wh)

An electrical energy unit of measure equal to 1 watt of power supplied to, or taken from, an electric circuit steadily for 1 hour.

weighted moving average

The average of prices over a certain period, but weighted to give more importance to the latest price. So, if it were a 5-day MA, the latest price might be weighted by a factor of 5, yesterday's by a factor of 4, the day before by 3 times, the day before twice, and before that, the simple price. Different weighting systems can be used.

wet gas

Natural gas containing liquefiable hydrocarbons. Natural gasoline, butane, pentane and other light hydrocarbons can be removed by chailling and pressure or extraction. It also refers to gas that has water in excess of 7lb/mil cu ft (MMcf).

wheeling

In the gas business, refers to the transfer of gas between pipelines. In the power business, refers to the transfer of electrons across transmission grids

wheeling service

The movement of electricity from one system to another over transmission facilities of intervening systems. Wheeling service contracts can be established between two or more systems.

wholesale wheeling

The transmission of electricity from a wholesale supplier to another wholesale supplier by a third party

working gas

Volume of gas that is expected to be cycled from a natural gas storage facility.

WTI

West Texas Intermediate crude oil. WTI crude is deemed to be traded at Cushing, Oklahoma. Traders typically refer to the NYMEX Light Sweet Crude futures contract as the WTI contract, although the contract allows delivery of other grades.

WTS

West Texas Sour crude oil.

Zeebrugge

Belgian port. The terminus point of The (European) Interconnector, a gas line linking to the UK to continental Europe, and thus a major European gas delivery hub.